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Tuesday 9 November 12:44 PM
PRESS RELEASE: S&P Revises Lend Lease Watch To Developing(MORE) Dow Jones Newswires November 08, 2004 20:41 ET (01:41 GMT) S&P Revises Watch On Lend Lease To Developing (MORE) Dow Jones Newswires November 08, 2004 20:41 ET (01:41 GMT) PRESS RELEASE: S&P Revises Lend Lease Watch To Developing
MELBOURNE (Standard & Poor's) Nov. 9, 2004--Standard & Poor's Ratings Services said today that Stockland Trust Group's intention to merge with General Property Trust (GPT; A+/Watch Neg/A-1) could adversely affect the credit ratings on Lend Lease Corp Ltd. (LLC). As a consequence, the CreditWatch on LLC's 'BBB/A-2' ratings has been revised to CreditWatch Developing, from CreditWatch Positive. The ratings on LLC had been placed on CreditWatch Positive on May 25, 2004. If the Stockland bid is successful, LLC risks losing about 10% of its historical pretax profit, which is expected to reduce further due to the growth in LLC's other business activities, and its strategy of growing a portfolio of Australian investment assets would be placed in doubt. One of the key reasons behind LLC's bid to merge with GPT is to consolidate the merged group's position in the Australian property market and unlock the growth potential in the existing business, market positions, asset portfolios, development pipeline, and funds management activities. Without the GPT assets, LLC's ability to grow its Australian business would be hampered. In addition, Standard & Poor's will seek to understand how LLC would look to replace the long-term asset management fees derived by LLC from GPT, the gross profit margin derived from Bovis Lend Lease's redevelopment of the GPT portfolio, and its capacity to source future development opportunities. Standard & Poor's expects that if the LLC merger with GPT were successful in its current form, the long-term rating on the merged entity would be either 'A-' or 'A'. If the Stockland merger with GPT were successful, the ratings on LLC could be either affirmed or lowered to 'BBB-'. Standard & Poor's will update the CreditWatch placements once a bid is successful, and LLC's future business and operating strategy is confirmed. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. Standard & Poor's (Australia) Pty. Ltd. doesn't hold an Australian financial services license under the Corporations Act 2001. Any rating and the information contained in any research report published by Standard & Poor's is of a general nature. It has been prepared without taking into account any recipient's particular financial needs, circumstances, and objectives. Therefore, a recipient should assess the appropriateness of such information to it before making an investment decision based on this information. Primary Credit Analyst: Craig Parker, Melbourne (61) 3-9631-2073; craig_parker@standardandpoors.com Secondary Credit Analyst: Paul Draffin, Melbourne (61) 3-9631-2122; paul_draffin@standardandpoors.com Copyright (c) 2004, Standard & Poor's Ratings Services
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